China increasingly involved in Brazil’s ambitious Amazon rail network

The environmental cost of agribusiness expansion into the Amazon basin and the Cerrado savanna isn’t limited to the felling of forests and destruction of native vegetation to make way for crops. Agribusiness growth there also requires major new transportation infrastructure corridors ­– railways, roads, industrial waterways, river ports, and other logistic support – to efficiently move soy and other crops from the Amazon and Cerrado interior to market in China, the European Union and elsewhere.

If precautions aren’t taken, this infrastructure could do great damage to the environment, and indigenous and traditional communities, particularly due to the population influx they inevitably trigger.

Over the last 20 years, grain production has exploded in northern Mato Grosso state, and today the process is being repeated in Matopiba, the agribusiness acronym for the parts of the Cerrado savanna biome located in the states of Maranhão, Tocantins, Piaui and Bahia. The Cerrado is the scene of Brazil’s most recent agribusiness expansion, as cattle, soy, corn, cotton and eucalyptus rapidly replace native vegetation.

Traffic jam of commodities-loaded trucks on the BR-163 highway in the Brazilian Amazon. Analysts see the construction of Grainrail as the solution to the traffic problem, though the railroad also poses serious environmental problems. Image courtesy of Verde Vale FM.While the agricultural boom has been very quick, the building of new infrastructure has been much slower, so transport bottlenecks have emerged all over the region, most notably on the inadequate roads of northern Mato Grosso and Pará states. New highways are being built and old ones paved, but their capacity is being overwhelmed even before they’re completed.

The result: bumper-to-bumper Amazon traffic jams that delay delivery and eat into agribusiness producer and commodity company profits.Some see the construction of railways and industrial waterways as the best long-term solution for this logistical nightmare. Rail and water transport bring down freight charges and trains emit far fewer greenhouse gases than trucks. Today, many in Brazil’s interior are putting their hopes for new infrastructure in Chinese investment and construction. But there are serious downsides to this potential development, especially when routes cross protected areas and indigenous reserves.

The disastrous Madeira-Mamore-railway, costing thousands of lives, and ultimately an economic failure, serves as a warning to entrepreneurs and nations who wish to develop railroads in Amazonia. Image courtesy of the Museu Paulista da USP.A brief history of Amazon railSurprisingly few railroads have been built in Amazonia. Most famous is the catastrophic Madeira-Mamoré railway, built between 1907-1912 to link Porto Velho to Guajará-Mirim in western Brazil. The goal: provide a way to rapidly move rubber tapped in Bolivia to Amazon streams, for shipment to Europe and the United States. In the longer term, planners also dreamed of linking the Pacific and Atlantic oceans – an ambition being revived today.

The Madeira-Mamoré line was quickly dubbed the “Devil’s Railroad” due to the thousands of construction workers who died from tropical disease and violence. Legend says that a corpse is buried under each sleeper. Though completed, the railroad was soon abandoned when the rubber boom went bust.

More economically successful is the 892-kilometer (554 mile) railroad that annually hauls 120 million tons of iron ore from the huge Carajás mine in Pará state to the port of Ponta da Madeira in Maranhão state. But, in an indication of the trouble that could lie ahead for future railways, the line has caused many conflicts with communities, particularly the Gavião indigenous group. The Gavião have repeatedly complained that the railway divided their land in two, disrupting their lives and frightening away the animals they hunt, yet they haven’t received the compensatory help promised by the mining company.

The Gavião indigenous group has expressed anger at the socio-environmental impacts of the Carajás mine in Pará state and at its railroad. Image by Pedro Aguiar Stropasolas.Despite these problems, powerful sectors of the Brazilian government, along with transnational trading companies, such as Cargill, Bunge and Amaggi, and farmers, have long fantasized about installing a vast integrated rail network, crisscrossing the Amazon basin, to provide efficient transport links to get commodities to market. But in the past, this was just that – a fantasy.

However, today many businesspeople believe the coming together of key factors is putting the dream within grasp. The first concrete step will likely come with the construction of Ferrogrão (Grainrail), which could carry soy produced in northern Mato Grosso to the Tapajós and Amazon rivers. But that would be just a start toward an Amazon rail network.

China’s Belt and Road Initiative showing China in red, the members of the Asian Infrastructure Investment Bank in orange, and the 6 proposed corridors of the Silk Road Economic Belt, a land transportation route running from China to Southern Europe, and the 21st Century Maritime Silk Road, a sea route. Brazil’s place in Belt and Road is still being determined. Image by Lommes licensed under the Creative Commons Attribution-Share Alike 4.0 International license.Brazil’s place in China’s Belt and Road initiativeChina, with its 1.3 billion people, has long seen food security as a key objective of its investment strategies and international trading relations. In recent years that goal has assumed new urgency. According to Professor Peter Williams, a UK climate scientist, “Sooner or later, there will be an unbridgeable gulf between global food needs and our capacity to grow food in an unstable climate. Inevitably, starvation will reduce the world’s population.” Williams continues: “China is positioning itself for the struggle to come – the struggle to find enough to eat. By controlling land in other countries, they will control those countries’ food supply.”

One way of ensuring national food security is by improving international supply routes. In 2014, President Xi Jinping announced an ambitious plan to integrate China’s supply networks across much of the world. Called Belt and Road, the initiative is envisioned as a 21st Century Silk Road, composed of a “belt” of land transportation corridors and a “road” of sea routes and ports, with every path leading from vital commodities resources into China.

Environmentalists have responded to Belt and Road with deep concern, as it could offer a means for plundering the world’s forests and minerals, potentially at the expense of local economies, the environment, and indigenous and traditional communities.

At first, the initiative was limited to Asia, Europe and Africa, and it seemed Brazil would not benefit. But, at a meeting of the Community of Latin American and Caribbean States (CELAC) in January 2018, Chinese Foreign Minister Wang Yi formally invited Latin America to join. Importantly, Chinese analysts see the United States as retreating from Latin America and are keen for their country, and its state-owned businesses, to fill the vacuum.

Roberto Jaguaribe, president of the Brazilian Agency for Export Promotion and Investments (Apex-Brasil), welcomed this Chinese invitation as a great opportunity for Brazil, saying that Chinese investment in railways, energy generation and other sectors is “essential” for national economic growth. “Brazil is a strategic partner of enormous importance [for China]” said Jaguaribe. “We need to construct a relationship grounded in economic complementarity and in the great convergence of interests that exists between the two countries.”

This “convergence of interests” is born out of a simple reality: Brazil is a leading exporter of primary goods ­– crops, meats and minerals – for which China has a growing need.

Soy, an increasingly important global commodity, with the U.S. and Brazilian producers battling fiercely for the Chinese market. Image by Jean Weber / INRA licensed under the Creative Commons Attribution 2.0 Generic license.